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Regulatory statutes

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Partnership means LLC unless otherwise required by context or inconsistent with Act ... conveyance (Firmani) TIB(Albright) Fiduciary duties and Elf. Manager-managed ... – PowerPoint PPT presentation

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Title: Regulatory statutes


1
Regulatory statutes
  • Federal regulation interaction with state law
  • Securities laws
  • Employment discrimination
  • Diversity jurisdiction
  • Myriad others
  • State regulation interaction with other state
    laws -- Meyer
  • Constitution no reference to LLCs
  • LLC statute any lawful purpose.
  • Why not a partnership?
  • A statutory solution S.C. 33-44-1205
  • Partnership means LLC unless otherwise required
    by context or inconsistent with Act

2
Finances
  • Per capita vs. pro rata
  • Use of capital accounts 3.1 3.4
  • Profit allocations 4.2, 1.10
  • Stock options
  • Limited liability ULLCA 303
  • Share certificates
  • Additional contributions 3.2-3.3
  • Interim distributions 4.4

3
Management
  • Internal (ULLCA 404) vs. external (ULLCA 301)
  • Agency issues
  • Scope of manager authority
  • Who is manager or member
  • Scope of non-manager authority
  • Effects of certificate and agreement
  • Choice of law and form
  • Effect of designating officers

4
Agency in LLCs
  • Assume pledge of real property to secure loan
    executed by X on behalf of the LLC. ULLCA and
    Chameleon agreement apply and the articles
    provide for management by managers. Is the pledge
    binding if
  • (1) X is not a member?
  • (2) X is listed on Schedule A as manager?
  • (3) X is identified as a manager in the articles
    of organization but not on Schedule A?
  • (4) X is not identified anywhere as a manager.
  • (5) Same as 2 but money given to X individually?
  • What result in the above situations if the
    articles do not provide for management by
    managers?

5
Voting
  • Right to vote 8.1
  • Voting power 8.1
  • Voting trusts
  • Class voting
  • Meetings 8.3

6
Reverse limited liability
Litchfield
657k
145k
103k
Antiquities
Design
Litchfield
Howell
97
97
The general problem
TIB(Albright)
Owner
Owners creditors
LLC
assets
Firms creditors Other owners
Veil-piercing (Litchfield)
Fraudulent conveyance (Firmani)
7
Fiduciary duties and Elf
  • Manager-managed
  • Managing members General partners? corporate
    directors?
  • Non-managing members Limited partners?
    Shareholders?
  • Effect of ULLCA 409(h)?
  • Member managed General partners?
  • Waiver
  • Elf agreement 13.7 (forum selection) 13.8
    (arbitration)
  • Fiduciary duties Gotham and 18-1101
  • Derivative remedy and arbitration 18-1001
  • Delaware jurisdiction 18-109(d), 110(a), 111

8
Valinote
  • Ballis buys out Valinote for negative sum
    equaling what LLC owes Valinote.
  • Agreement
  • 10.C.2 Negotiated buyout obligations to 3d
    parties unaffected.
  • 11.C Resigning member receives formula value
    obligations to 3d parties unaffected.
  • 9.J Members indemnify other members for
    obligations under guarantees
  • 9.E.1 Company indemnifies former member for
    liability incurred while a member.
  • 9.D Members look solely to LLCs assets
  • Why would V pay B under 10.C.2. when he could get
    positive price under 11.C.?
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